Summary Annual Report

Transcription

1 Summary Annual Report 2014

2 2 To Our Shareholders 4 Financial & Operating Summary 6 The Outlook for Energy 8 Creating Value Through the Cycle 28 Global Operations 30 Upstream 32 Downstream 34 Chemical 36 Corporate Citizenship 39 Financial Information 44 Frequently Used Terms 46 Directors, Officers, and Affiliated Companies 48 Investor Information 49 General Information COVER PHOTO: Construction has started on ExxonMobil s largest-ever chemical investment in the United States. The project will capitalize on low-cost feed and energy to expand production of premium polyethylene at our Mont Belvieu Plastics Plant in Texas. Statements of future events or conditions in this report, including projections, targets, expectations, estimates, and business plans, are forward-looking statements. Actual future results, including demand growth and energy mix; capacity growth; the impact of new technologies; capital expenditures; production growth; project plans, dates, costs, and capacities; resource additions, production rates, and resource recoveries; efficiency gains; cost savings; product sales; and financial results could differ materially due to, for example, changes in oil and gas prices or other market conditions affecting the oil and gas industry; reservoir performance; timely completion of development projects; war and other political or security disturbances; changes in law or government regulation, including environmental regulations and political sanctions; the actions of competitors and customers; unexpected technological developments; general economic conditions, including the occurrence and duration of economic recessions; the outcome of commercial negotiations; unforeseen technical difficulties; unanticipated operational disruptions; and other factors discussed in this report and in Item 1A of ExxonMobil s most recent Form 10-K. Definitions of resources and resource base, as well as certain financial and operating measures and other terms used in this report are contained in the section titled Frequently Used Terms on pages 44 and 45. In the case of financial measures, such as Return on Average Capital Employed and Free Cash Flow, the definitions also include information required by SEC Regulation G. Factors Affecting Future Results and Frequently Used Terms are also available on the Investors section of our website. Prior years data have been reclassified in certain cases to conform to the 2014 presentation basis. The term project as used in this publication can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.

3 1 A new era of energy abundance. For decades, fears of scarcity have shaped energy policy around the world. But in recent years, investments and innovations by the energy sector have made it possible to challenge this old way of thinking. New industry technologies are leading to the development of new supplies of energy, in a safe, secure, and environmentally responsible way. This new era of abundance holds the potential to spur hope and opportunity for billions of people. Energy powers life and fuels progress. Energy is so fundamental to every human aspiration and endeavor that there is a humanitarian imperative to expand energy supplies and meet the needs of a growing global population. Access to affordable and reliable sources of energy is a vital first step to unleashing economic growth and improving basic health standards, especially in developing economies. Energy development also helps power the technologies that increase efficiency and productivity, opening up new jobs for individuals and new markets for businesses, communities, and nations. Global energy demand will grow significantly in the years ahead. ExxonMobil has the ability to invest in projects with the highest returns. And given the universal need for energy, we are well positioned to continue to deliver long-term value for our shareholders through the cycle.

4 2 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT To Our Shareholders ExxonMobil is dedicated to generating long-term shareholder value. We recognize the nature and risk of the commodities we produce and have positioned our businesses to be successful throughout the business cycle. We provide industry leadership and innovative technologies to meet the world s greatest challenge supplying the energy needed to improve and sustain the lives of billions of people while protecting the environment for future generations. Our business approach enables us to maintain strong financial results throughout a cyclical business environment and remain the partner of choice for resource owners across the energy value chain. As you will read in the coming pages, our success is achieved through our operational excellence, project execution capabilities, and the application of new technologies, underpinned by strong financial flexibility, investment discipline, and a world-class workforce. Results from 2014 reflect our continued ability to capitalize on the strength of our integrated businesses and the talents of the 75,000 men and women who work for ExxonMobil. Our people are committed to the highest standards of business conduct and integrity in the pursuit of premier results. We delivered solid financial and operating results despite challenging and volatile economic and geopolitical conditions, as highlighted by earnings of $32.5 billion and an industry-leading return on average capital employed of 16.2 percent. Production of 4 million oil-equivalent barrels per day was in line with our plans as we added new volumes from project start-ups and work programs. We invested in attractive opportunities with capital and exploration expenditures of $38.5 billion. Cash flow from operations remained strong, enabling us to achieve shareholder distributions of $23.6 billion in the form of dividends and share purchases to reduce shares outstanding. Over the past five years, ExxonMobil has distributed an industry-leading $128 billion to shareholders, while maintaining a strong balance sheet. In achieving these results, we maintain an unwavering commitment to operational excellence and effective risk management that delivered strong environmental results and best-ever safety performance in We know that effective management of risk is an imperative to achieving our vision that Nobody Gets Hurt. We delivered solid financial and operating results despite challenging and volatile economic and geopolitical conditions, as highlighted by earnings of $32.5 billion and an industry-leading return on capital employed of 16.2 percent. We continue to successfully advance major resource development projects in the Upstream. ExxonMobil remains on target to grow production to 4.3 million oil-equivalent barrels per day by 2017, while maximizing profitability derived from resource quality, volume mix, improved fiscal terms, and reduced exposure to lower-margin barrels. Over the past year, we completed eight new major projects with more than 250 thousand oil-equivalent barrels per day of working interest production capacity. Our liquefied natural gas project in Papua New Guinea represents one of several significant achievements and underscores ExxonMobil s expertise in major project development. The facilities were completed ahead of schedule and ramped up to full operational capacity in just three months. The benefits from the project have the potential to transform the country s economy, boosting GDP and revenues for social and economic programs. Other successful projects completed this year include Arkutun-Dagi in Russia; Cold Lake Nabiye Expansion in Canada; Lucius in the Gulf of Mexico; and Cravo-Lirio-Orquidea-Violeta (CLOV) in Angola. In the United States, ExxonMobil is increasing development activities to grow higher-margin liquids production across the Permian, the Bakken, and the Ardmore/Marietta plays. We continue to add attractive acreage to our portfolio and implement advanced technologies to improve well productivity and capture cost efficiencies. New project start-ups such as Banyu Urip in Indonesia; Kearl Expansion in Canada; and Hadrian South in the Gulf of Mexico will add significant volume in We also anticipate new production in the Gulf of Mexico, the United Arab Emirates, Australia, Kazakhstan, and Canada in 2016 and As we look beyond 2017, ExxonMobil has a deep and diverse portfolio of opportunities around the world, and a total resource base of more than 92 billion oil-equivalent barrels. We have unparalleled optionality to select and invest in only the most attractive resource development projects. In the Downstream and Chemical businesses, we continue to capture significant benefits by diversifying feedstocks through our flexible and integrated system, driving operational efficiencies, expanding logistics capabilities, and maximizing sales of higher-value lubricant, diesel, and chemical products.

5 3 Our capacity to process lower-cost ethane into ethylene already leads the industry in the United States. We are growing that leadership position with the expansion of our site in Baytown, Texas, by adding a 1.5-million-tonnes-per-year, worldscale ethylene plant, and building two of the largest premium polyethylene lines in the industry at the nearby Mont Belvieu Plastics Plant. Start-up is anticipated in In Saudi Arabia, we commissioned the Clean Fuels Project at the Saudi Aramco Mobil Refinery to reduce sulfur levels in gasoline and diesel by more than 98 percent to meet more stringent fuel standards in the Kingdom. We are also working with our joint venture partner, Saudi Basic Industries Corporation, to expand the chemical products manufactured in the region. A new world-scale, 400-thousand-tonnes-per-year facility, starting up in 2015, will provide a strategic platform to help meet the growing demand for specialty elastomers. In Antwerp, Belgium, at our largest and most cost-efficient refinery in Europe, we started construction to install a 50-thousand-barrel-per-day delayed coker to help meet growing demand for cleaner transportation fuels. The success of our integrated business is achieved by connecting the strengths of each of our individual businesses through our organization structure, systems, and work processes. The results allow us to maximize the value of every molecule we produce, refine, or manufacture. ExxonMobil achieves sustained competitive advantages by integrating knowledge of upstream supply sources with refining and chemical facilities, along with marketing expertise to optimize the conversion of crude oil, natural gas liquids, and intermediate streams to manufacture high-value products. Strategic decisions and successes across our business segments are based on a long-term view of the business and a commitment to effective risk management. We deliver growth in shareholder value by anticipating, planning for, and mitigating geopolitical risks and uncertainty throughout our broad, diversified global portfolio. Our investments are evaluated against a wide range of economic factors, including commodity prices and market demand, to ensure leading financial returns throughout the business cycle. Our Outlook for Energy long-term supply and demand forecast underpins our strategy and investment plans. With population growth, rising economic prosperity, and increasing trade and technology, we project global energy demand to grow 35 percent between 2010 and While our projections of the world s long-term demand for energy have not changed significantly, the current energy environment certainly has changed dramatically. Within the last decade, investments and technologies have unlocked an abundance of new supply sources. Today, many resource owners are competing for capital investments and expertise to develop their hydrocarbon endowments. ExxonMobil s technology leadership, financial strength, and major project execution capabilities enable us to pursue profitable, high-return opportunities as the partner of choice. These are just some of the endeavors that your investments in ExxonMobil have made possible. As you read this year s Summary Annual Report, you will see your Company at work in many other innovative and visionary ways as we expand the supply of energy needed to fuel global economic growth and enable broader human progress. In these endeavors, you may be assured that regardless of the business conditions presented to us, we will stay the course in pursuit of delivering long-term shareholder value. Rex W. Tillerson, Chairman and CEO

6 4 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT 2014: Financial & Operating Summary Results & Highlights Strong environmental results and best-ever safety performance supported by effective risk management Earnings of $32.5 billion and industry-leading return on average capital employed (1) of 16.2 percent Capital and exploration expenditures (1) of $38.5 billion Free cash flow (1) of $17.9 billion, up $7.3 billion compared to 2013 Dividends per share increased 9.5 percent in the second quarter of 2014, the 32nd consecutive year of dividend-per-share increases Total shareholder distributions (1) of $23.6 billion Proved oil and natural gas reserves (1) additions of 1.5 billion oil-equivalent barrels, replacing more than 100 percent of production for the 21st consecutive year Completed eight major Upstream projects with working interest production capacity of more than 250 thousand oil-equivalent barrels per day, highlighted by the Papua New Guinea Liquefied Natural Gas project Began construction of a world-scale steam cracker at our integrated complex in Baytown, Texas, to capitalize on abundant supplies of American natural gas liquids Investing in a new delayed coker unit at our refinery in Antwerp, Belgium, to convert lower-value bunker fuel oil into higher-value diesel products Successfully drilled the first ExxonMobil-Rosneft Joint Venture Kara Sea exploration well in the Russian Arctic Exploration discoveries totaling 2.7 billion oil-equivalent barrels Functional Earnings and Net Income Upstream Downstream Chemical Corporate (billions of dollars) and Financing 50 Net Income (2) Return on Average Capital Employed (1)(3) average (percent) (1) See Frequently Used Terms on pages 44 and 45. (2) Net income attributable to ExxonMobil. (3) Competitor data estimated on a consistent basis with ExxonMobil and based on public information. 5 0 ExxonMobil Chevron Shell Total! CHART IS IN BP BOTH SAR and F&O Charts are different sizes, different footnotes

7 5 Creating Value Through the Cycle ExxonMobil s strategies are designed to deliver success. Our 2014 results once again demonstrate the strength of our integrated model and the benefit of our sound business approach. Our underlying financial flexibility remains a source of confidence in this period of rapid change in the energy markets. We continue to progress a unique and balanced set of attractive opportunities, which positions us well to deliver long-term shareholder value. Financial Highlights (millions of dollars, unless noted) Earnings after Income Taxes Average Capital Employed (1) Return on Average Capital Employed (%) (1) Capital and Exploration Expenditures (1) Upstream 27, , ,727 Downstream 3,045 23, ,034 Chemical 4,315 22, ,741 Corporate and Financing (2,388) (8,029) N.A. 35 Total 32, , ,537 Operating Highlights Liquids production (net, thousands of barrels per day) 2,111 Natural gas production available for sale (net, millions of cubic feet per day) 11,145 Oil-equivalent production (2) (net, thousands of oil-equivalent barrels per day) 3,969 Refinery throughput (thousands of barrels per day) 4,476 Petroleum product sales (thousands of barrels per day) 5,875 Chemical prime product sales (1) (thousands of tonnes) 24,235 32nd Consecutive Year of Dividend Growth (3) ExxonMobil S&P 500 Consumer Price Index (4) (dollars per share) Total Shareholder Returns (1) ExxonMobil Integrated Oil Competitor Average (5) S&P 500 (percent per year) Years 5 Years 10 Years 20 Years (1) See Frequently Used Terms on pages 44 and 45. (1) See Frequently Used Terms on pages 44 and 45. (2) Natural gas converted to oil-equivalent at 6 million cubic feet per 1 thousand barrels. (2) Natural gas converted to oil-equivalent at 6 million cubic feet (3) S&P and CPI indexed to 1982 Exxon dividend. per 1 thousand barrels. (4) CPI based on historical yearly average from Bureau of Labor Statistics. (3) S&P and CPI indexed to 1984 Exxon dividend. (5) BP, Chevron, Royal Dutch Shell, and Total values estimated on a consistent basis with ExxonMobil (4) CPI based and on based historical on public yearly information. average from Bureau of Labor Statistics. (5) BP, Chevron, Royal Dutch Shell, and Total values estimated on a consistent basis with ExxonMobil and based on public information.

8 6 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT The Outlook for Energy: A View to 2040 The Outlook for Energy is our long-term global view of energy demand and supply, and its findings underpin our strategic investment programs. Forecasting long-term energy trends begins with a simple fact: People need energy. Over the next few decades, population and income growth, as well as an unprecedented expansion of the global middle class, are expected to create new demands for energy. Overall, we see global energy consumption rising by about 35 percent from 2010 to Energy and Human Progress People have long aspired to better living conditions, yet only recently have living standards improved dramatically. Looking back, we attribute this remarkable human progress to three interwoven elements: technology, energy, and trade. As The Outlook shows, people s desire for a better life and their capacity for innovation are expected to continue to drive unprecedented gains in global living standards through Energy Demand is Growing Energy demand trends are expected to vary significantly around the world as countries move along very different trajectories due to key demand drivers, including population, demographics, economic growth, and income levels. As the world population increases by an estimated 30 percent between 2010 and 2040, we see global GDP rising by about 140 percent as all countries experience economic growth. Expansion of the Organisation for Economic Co-operation and Development (OECD) economies will be more than offset by improved energy efficiencies, resulting in a projected decline in energy demand. In contrast, China, India, and other non-oecd countries are expected to see very rapid expansion fueled by strong middle class growth. Liquids and Natural Gas Supplies Continue to Expand Advances in technology and significant investments continue to expand the availability of energy supplies to meet this growing demand. As energy needs continue to evolve around the world, practical supply alternatives must continue to meet a range of consumer requirements in terms of convenience, performance, and affordability, while also managing potential associated environmental impacts. Among the most significant advances will be those related to the development of unconventional oil and natural gas resources, while nuclear and modern renewable energy supplies also become more prominent in many countries. Globally, oil is expected to remain the largest of any energy supply source, driven by rising production from resources like deep water, oil sands, and tight oil. By 2025, natural gas will have overtaken coal as the second-largest fuel source. Developing-Country Needs Drive Energy Growth Oil and Gas: Largest Energy Sources in the Future OECD (1) Non-OECD (quadrillion BTUs, or Quads) 1,400 1,200 1,000 Energy saved through efficiency gains ~500 Quads (quadrillion BTUs) % Average growth rate per year % % % 2.3% 5.8% 1.8% Source: ExxonMobil, 2015 The Outlook for Energy: A View to 2040 (1) OECD = Organisation for Economic Co-operation and Development. 0 Oil Gas Coal Biomass Nuclear Wind/ Solar/ Biofuels Hydro/ Geo

9 7 Resources: Then and Now Current recoverable resources are sufficient to meet the world s need for oil and gas beyond the 21st century. Today, as in the past, improvements in exploration and production technologies continue to open doors to new oil and gas resources. In terms of assessing mankind s ability to meet future oil and gas demand, what matters is not how much hydrocarbon is in the ground (a fixed, although unknown number), but how much of that resource is technically recoverable (a number that changes over time). The U.S. Geological Survey (USGS) estimates that total remaining global recoverable crude and condensate resources have grown from about 1 trillion barrels in the 1980s to about 4.5 trillion barrels today. The International Energy Agency estimates the world s remaining recoverable natural gas resources have more than doubled to about 28,500 trillion cubic feet from 2000 to year-end Advances in technology have enabled this growth. One example is the discovery of deepwater resources and the development of technology to produce them. Another is Canadian oil sands. Early on, recovery factors for in situ (non-surface mined) oil sands were estimated to be around 10 percent, but these estimates have more than quadrupled through the application of advanced technologies. More recently, unconventional production technologies, such as hydraulic fracturing and horizontal drilling, have unlocked significant resources of oil and natural gas that will help supply global markets for many decades. These human innovations continue to extend years of coverage the amount of time resources would last given current demand. In 1981, the USGS estimated there was less than 60 years worth of recoverable crude and condensate. By year-end 2013, years of coverage had more than doubled to over 150 years. Gas resources are currently expected to have more than 200 years of coverage given current demand. PHOTO: By 2040, per capita GDP in China is expected to be four times higher than it was in 2010, driving an increase in the country s energy demand, and reliance on new oil and gas resources.

10 8 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Operational Excellence 50% ExxonMobil has reduced its Lost-Time Injuries and Illnesses Rate by over 50 percent for employees and contractors over the past 10 years.

11 9 PHOTO: Operational excellence begins with a competent workforce. Backed by comprehensive management systems, our employees and contractors form the foundation for strong operational performance as demonstrated in places like the Fife Ethylene Plant in the United Kingdom.

12 10 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Operational Excellence Maximizing shareholder value requires a relentless focus on operational excellence and effective risk management. Driven by our talented and committed workforce, proven management systems are rigorously employed at ExxonMobil facilities around the globe and incorporated into daily operations. These systems enable continuous improvement in safety, security, health, and environmental performance. Culture of Excellence Operational excellence underpins everything we do at ExxonMobil. Our management systems enable us to maintain high operational standards by providing a framework of proven processes and best practices. We are proud of the culture of excellence reflected in the daily accomplishments of our employees around the world. It is a culture built over decades by employees dedicated to doing the right things in the right way, Comprehensive management systems help us achieve without compromises to our values. This culture extends operational excellence and are consistently applied in our to our contractors as we partner and share our vision businesses around the world, including at our Antwerp with them. Refinery in Belgium (above) and our LaBarge Production Unit in Wyoming (right). Achieving operational excellence starts with strong leadership, which can be found in every part of our organization and in everyone, regardless of their role. This inherent leadership drives our culture of excellence and encourages the behaviors that sustain high operational standards. Our goal is to retain employees for the long term so they can grow professionally, contribute to our strong experience base, and develop into our next generation of global leaders. Employees receive diverse experiences and assignments enabled by our global functional organization, which encourages the sharing of information and talent. This philosophy extends to local workforce development, where we hire and train people from the countries in which we operate. Highlight: OIMS Framework ExxonMobil s Operations Integrity Management System (OIMS) framework includes 11 elements. Each element contains an underlying principle and a set of expectations. Application of the OIMS framework is required across all of ExxonMobil, with particular emphasis on facility design, construction, and operations. Management is responsible for ensuring that appropriate systems satisfying the framework are in place and tested for compliance on a regular basis. Management Leadership, Commitment, and Accountability 2 Risk 3 Facilities 4 Assessment Design and and Construction Management Information/ Documentation Operations Integrity Assessment and Improvement 1 5 Personnel 6 Operations and Training and 7 Maintenance Management of Change 11 8 Third-Party 9 Incident 10 Community Services Investigation Awareness and and Analysis Emergency Preparedness

13 11 Our Commitment to Safety, Security, Health, and the Environment ExxonMobil s Operations Integrity Management System (OIMS) is a cornerstone of our commitment to managing safety, security, health, and environmental risks, and achieving excellence in performance. The OIMS framework establishes common worldwide expectations for managing risks inherent to our business and addresses all aspects that can impact personnel and process safety, security, health, and environmental performance. The focus on process safety protects our workforce, our equipment and assets, the local environment, and the communities in which we operate. OIMS provides the structure to help us meet or exceed applicable regulations and relevant industry standards. We continually assess the framework and its effectiveness, and incorporate learnings to further improve performance. OIMS is implemented consistently around the world in all business lines, and compliance is tested on a regular basis. As we manage the safety, security, health, and environmental risks in our business, we focus our efforts on understanding the root cause and potential consequence of each injury, spill, or process safety event. We assess the facilities and effectiveness of our procedures, personnel training, and execution discipline to gain insight from actual, near-miss, or potential events, then share the learnings across our businesses. Through analysis of past or potential events, including industry events, the aim is to prevent incidents. Risk Management We take a systematic approach to risk management, guided by OIMS. Every activity contains some element of risk whether technical, operational, procedural, financial, or environmental. We each take responsibility to identify the elements of risk inherent in all our endeavors. We look to understand the consequences associated with these risks and find solutions that would eliminate, mitigate, or manage the risk to an acceptable level. Through the use of appropriate protective measures and safeguards, the likelihood or severity of an undesirable event can be reduced. Our thoughtful change management approach enables us to effectively identify, plan for, and mitigate changed conditions and risks along with their potential consequences throughout our operations. As a result, management of change is a key component of our OIMS framework. Our approach to risk management is supported by well-developed and clearly defined policies and procedures to ensure that we have a structured, globally consistent system with the highest standards in place. Highlight: OIMS Execution At ExxonMobil, we look to ensure effective safeguards are intact. OIMS: Layers of Protection Hazards Undesired Consequences

14 12 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT 16 Major projects planned to be completed over the next three years.

15 13 C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Upstream: Demonstrating Project Execution Capabilities PHOTO: Production from Banyu Urip, Indonesia, is transported 60 miles via pipeline to a mooring tower, floating storage and offloading vessel.

16 14 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Upstream: Demonstrating Project Execution Capabilities ExxonMobil is building upon its 115-year history in Indonesia by progressing completion of the world-class Banyu Urip project, the country s largest new oil development. At a cost of more than $3 billion, the project will deliver substantial liquids production while providing multiple benefits to Indonesia and its people. World-Class Project The Banyu Urip project is the first development in the Cepu Block, located onshore in East Java, Indonesia. The Banyu Urip field was discovered in 2001, and a production sharing contract (PSC) was signed in ExxonMobil holds a 45-percent working interest in the Cepu Block, with PT Pertamina owning 45 percent and local government companies holding the remaining 10 percent. At peak production, Banyu Urip is expected to produce up to 165 thousand barrels of oil per day. Recoverable resources are estimated at 450 million barrels of oil. ExxonMobil is building on its project execution capabilities to deliver multiple components of the project, which are being executed by five Indonesian-led engineering, procurement, and construction (EPC) consortiums. The final EPC contract was signed in 2011, initiating the execution phase of the project. Banyu Urip: By the Numbers 165 thousand barrels per day of peak oil production targeted in million barrels of recoverable oil reserves Over $3 billion total project and drilling investment 460 Indonesian companies contracted for project activities Over 10,000 Indonesian workers at peak construction More than 70,000 community members benefited from education, health, and economic development programs 3,000 teachers trained, serving 33,000 students To limit its environmental footprint, the project s 48 wells are drilled from only three well pads. Produced oil, water, and gas are processed at a central processing facility. Crude oil then flows through 60 miles of onshore and offshore pipelines to an offshore mooring tower that connects to a floating storage and offloading (FSO) vessel, which can store up to 2.2 million barrels of oil. The mooring tower, anchored into the seabed in about 100 feet of water, has a large swiveling assembly to enable the vessel to rotate freely with shifting winds, waves, and currents without disrupting the flow of oil coming from the pipeline. Construction of the pipelines, mooring tower, and vessel is complete, and over 90 percent of the project facilities have been installed. The drilling program is progressing ahead of schedule and facilities commissioning is under way. Safety of our workforce has been a primary focus during project execution. The team has achieved outstanding safety performance and has been recognized with multiple industry awards. ExxonMobil Lease Oil Field Gas Field Oil and Gas Field Solo River Tuban FSO Vessel Java Sea Lengo Jati Lengo Urip Pipeline EAST JAVA CENTRAL JAVA Cepu PSC Cendana Banyu Urip Jambaran Kedung Keris Alas Tua West BRUNEI MALAYSIA SUMATRA I N D O Jakarta JAVA Surabaya Indian Sea N E PHILIPPINES PAPUA NEW GUINEA S I A AUSTRALIA Surabaya

17 15 Production Ramp-Up While the full field development was being progressed, ExxonMobil installed facilities to bring early oil production to local markets. First oil from the Banyu Urip field was produced in An early production facility started up in 2009 with an initial production capacity of 20 thousand barrels of oil per day. As new wells were brought online, production increased to more than 40 thousand barrels per day. Total oil production will continue to ramp up until it reaches full field capacity in Once fully commissioned, the Banyu Urip facilities are anticipated to produce up to 165 thousand barrels of oil per day at peak capacity. From Indonesia, for Indonesia The Banyu Urip project has focused on developing the skills and knowledge base of Indonesian nationals through training and use of local contractors and suppliers. During project execution, 460 national companies supported the EPC consortiums as subcontractors, with 85 percent originating from areas neighboring the project facilities. At its peak, over 10,000 Indonesian workers were involved in the construction of facilities, with thousands coming from communities in the immediate surroundings. Overall, ExxonMobil delivered 2 million training hours to Indonesian workers through 2,500 courses. Increasing Indonesia s industrial capability has been a key focus area for the project team. The mooring tower and support structures, at a combined weight of over 3,800 tonnes, were fabricated on Java Island. Two 1,500-horsepower drilling rigs, the first ever constructed entirely in Indonesia, are being used to drill project wells. The positive legacy of Banyu Urip s construction will live on through the workers who continue to benefit from our training and mentoring programs. The project s impact will continue into the operations of the facilities and last for decades. More than 100 operations and maintenance technicians are being trained to operate the facilities during the production phase. Some have completed on-the-job training at ExxonMobil operations in Angola, Cameroon, Malaysia, Nigeria, and the United States. These Indonesian employees have returned home following the completion of their overseas assignments to run the Banyu Urip operations. Being a Great Neighbor ExxonMobil has invested in various community programs in East Java. More than 70,000 community members have benefited from our programs focused on education, health, and economic development. From teacher training (3,000 trained, serving 33,000 students) and educational assistance, to clean water and biogas supplies, to micro-loans for local citizens to begin new businesses, the Banyu Urip project has contributed greatly to the local communities. The project will also provide substantial economic benefits to the country. The total investment of more than $3 billion is expected to generate $30 billion in revenue for the Government of Indonesia. Overall, the Banyu Urip project is making a significant positive impact in Indonesia, both as the nation s largest new oil project, and as a key driver of economic growth and community enhancement.

18 16 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Upstream: Unlocking Resource Value PHOTO: We continue to develop both conventional and unconventional reservoirs across a leading position exceeding 1.5 million net acres in the Permian Basin, including increased drilling in the Wolfcamp.

19 17 92billion Oil-equivalent barrels of total resource base.

20 18 E X XO N M O B I L C R E A T I N G S U M M A R Y V A L U E A N N U A L T H R O U G H R E P O R T T H E C Y C L E Upstream: Unlocking Resource Value Driven by a strong acreage position and operational expertise in unconventional plays, ExxonMobil has emerged as the leading oil and gas producer in the United States. With support from our world-class research organization and Downstream businesses, our XTO organization is significantly growing production volume from liquids-rich plays in the Permian, Bakken, and Ardmore/Marietta. Permian: Expanding Horizontal Upside ExxonMobil is embarking on another phase of liquids growth from one of our oldest producing regions, the Permian Basin of West Texas and New Mexico, where we are a leading leaseholder and operator. Leveraging a vast land position exceeding 1.5 million net acres, and deploying substantial waterflood, CO2, and unconventional operations, net production surpassed 100 thousand oil-equivalent barrels per day at year-end 2014, up 15 percent from the prior year. Eighteen operated rigs were drilling liquids-rich wells at the end of the year. Net Liquids Production from Major U.S. Onshore Plays (thousands of barrels per day) Permian, Bakken, Ardmore/Marietta 50 The bulk of the 2014 gains occurred on our legacy properties, mainly as a result of increased infill drilling, waterflood optimization, workover activities, infrastructure additions, and water-handling improvements. For example, gross operated oil production in our Fullerton and Robertson fields has more than doubled over the past three years to more than 10 thousand barrels per day, as a result of an aggressive workover and infill drilling program in the main Clearfork reservoir. We continue to expand production capacity by progressing water and gas-handling improvement initiatives. Through third-party agreements, we recently completed gas gathering and plant projects in the Goldsmith and Parks Pegasus areas, allowing for more efficient processing of associated gas, improved uptime, reduced flaring, and higher yield. We also expanded our acreage position during 2014 through three transactions that roughly doubled our leasehold acreage to 130,000 acres in the core of the Wolfcamp play in the Midland Basin. The transactions highlight our disciplined investment approach and unique ability to execute deals with attractive valuations in a competitive industry environment. In 2014, 16 horizontal Wolfcamp wells were brought online with encouraging initial production as we continue to optimize drilling and completions, and further delineate acreage. The application of horizontal drilling, combined with hydraulic fracturing, is enabling commercial production from a larger area that was previously marginal or uneconomic because of poor rock properties. Legacy Acreage Part of this optimization also involves the application of data analytics DATA AS OF 02/13/2015 NEW 2014 Transactions MEXICO expertise to identify attractive acreage and inform completion design. "10" 87 Our proprietary analytical methods provide us with a cost-effective way "11" 91 to mine vast amounts of data to identify key "12" performance-enhancing TEX AS 103 "13" 131 controls. This allows ExxonMobil to rapidly improve performance Midland "14" 159 without investing substantial capital to learn"15" conventionally through Basin 185 successive designs. "16" 209 "17" NEW MEXICO Delaware Basin 230 Our presence throughout the Permian Basin value chain, from upstream production through Gulf Coast refining, offers multiple opportunities to maximize overall profitability and highlights the strength of our integrated model. Central Basin Platform TEXAS 250volumes are expected to grow, driven Going forward, Permian liquids by unconventional activities in the Wolfcamp, Spraberry, Bone Springs, 200 Wolfberry, and Wichita Albany reservoirs. Horizontal drilling in the Wolfcamp play provides the 150 largest component of growth

21 19 Bakken: Liquids Growth Engine In the Bakken, net production increased 38 percent in 2014, due to a record 144 wells brought to sales, improved well productivity, and accelerated pad development in our core acreage. Production has increased sixfold since our 2008 entry into the play. We were operating 16 rigs at year end, up 45 percent from the prior year. Natural gas sales are also growing, while gas flaring is being reduced with additional industry infrastructure and field modifications. Our operating efficiency is improving in the Bakken. We continually adjust our drilling and completion practices to reduce costs, and have experienced a 34-percent decline in per-well drilling days since The ExxonMobil proprietary XFrac completion technology, now piloted in more than 20 wells, will potentially enable further cost reductions as it significantly reduces the number of plugs between fracture stimulation stages deep in the well. Production from the Bakken increased almost 40 percent in 2014 through a record 144 wells to sales. Ardmore/Marietta: Entering the Development Phase In southern Oklahoma, net production from our Ardmore/Marietta liquids-rich plays increased 30 percent in 2014, attributable mainly to higher activity as we brought 89 wells to sales. Ten operated rigs were utilized across our leasehold of more than 225,000 net acres. In the Ardmore area, focus has turned to developing the core Woodford Shale acreage and optimizing spacing while we continue to delineate the overlying Caney Shale. Similar to our other unconventional plays, we are capturing substantial operating efficiencies in the Ardmore as drilling days per well have decreased by 46 percent since 2009 to roughly 33 days. In the Marietta area, which features a higher proportion of oil production, we commenced delineation of our leasehold in 2014 by bringing 12 wells to sales. Following the success of field trials in Fayetteville, ExxonMobil s Drilling Advisory System tool was deployed to support operations in the Ardmore Basin in It seamlessly integrates with existing drilling rig systems to promote consistent application of ExxonMobil s Fast Drill process, with cost savings derived from improved drilling efficiency and performance. CO2 injection from the Means Compressor Station is used to enhance oil recovery in the Permian Basin.

22 20 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT PHOTO: A new coker unit at our refinery in Antwerp, Belgium, scheduled for start-up in 2017, will help address the industry shortfall in capability to convert fuel oil into higher-value products such as diesel.

23 21 C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Downstream: Strengthening the Portfolio 26% Downstream s average return on capital employed over the past 10 years.

24 22 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Downstream: Strengthening the Portfolio ExxonMobil s Downstream investments continue to strengthen our advantaged assets by increasing high-value product yields, improving feedstock flexibility, expanding logistics capability, and increasing operating efficiency. We carefully evaluate investment opportunities across a wide range of market conditions and only advance projects generating long-term shareholder value. The success of our disciplined investment approach and the strength of our integrated model underpin our ability to outperform competition across the cycle. Increasing Higher-Value Product Yields A key focus area for our Downstream business is increasing the production of higher-value products at our advantaged sites. While the demand for petroleum products like gasoline and fuel oil is expected to decline, demand for higher-value products, such as ultra-low sulfur diesel, jet fuel, chemical feedstocks, and lubricants, is expected to continue to grow. Our investments will use advantaged technology to increase production of these products to meet future demand and improve profitability. Our fully integrated marketing and sales teams identify consumer demand trends and help us maximize the commercial value of every molecule we produce. In 2014, we commissioned the Clean Fuels Project at the Saudi Aramco Mobil Company Limited Refinery in Yanbu, Saudi Arabia. The site can now reduce sulfur levels in gasoline and diesel by more than 98 percent to meet more stringent fuel standards in the Kingdom. Investments over the past five years, including those at our joint venture refinery in Saudi Arabia, have expanded our ultra-low sulfur diesel capacity by more than 25 percent globally. Despite challenging market conditions, we have some of the largest, lowest-cost refineries in Western Europe which benefit from fuels, lubes, and chemical integration. Building on our competitive cost position at our Antwerp Refinery, construction of a 50-thousand-barrel-per-day delayed coker began in Scheduled to start up in 2017, the new facility will help meet growing demand for cleaner transportation fuel by converting lower-value fuel oil into higher-value ultra-low sulfur diesel. At the Slagen Refinery in Norway, we will install a new processing unit to replace production of heavy fuel oil with lighter, higher-value gas oil. This feedstock is used to produce finished products such as lower-sulfur diesel. We also continue to expand our high-value lubricants business. Sales of our industry-leading products, Mobil 1, Mobil SHC, and Mobil Delvac 1, have grown by nearly 90 percent over the past 10 years. To further capture profitable growth, we are applying proprietary catalyst and processing technology to increase high-performance lube basestock capacity at our facilities in Texas, Louisiana, and Singapore. Additional lubricant plant expansions in China, Finland, Singapore, and the United States are also under way to support demand growth for finished lubricants and greases in key markets. Lube basestock expansions in Singapore (shown left) and Baytown will further extend our industry-leading basestock capacity by over 10 percent.

25 23 Improving Feedstock Flexibility and Expanding Logistics Capability We employ advantaged technologies to increase the flexibility of our facilities, allowing us to process the lowest-cost feedstocks available and increase margins. ExxonMobil has the largest combined mid-continent and Gulf Coast refining capacity in the industry, allowing our refineries to benefit from the growing North American crude oil supply. Investments continue to expand refinery flexibility. For example, we recently completed a metallurgy upgrade project at our refinery in Beaumont, Texas, expanding heavy Canadian crude processing capacity. We are also expanding capability to run higher-sulfur crudes in Baton Rouge, Louisiana. ExxonMobil North America Domestic Crude Processing (1) (percent) In North America, we are also investing to strengthen our crude oil and product logistics capabilities. For example, along with Kinder Morgan Canada Terminals, we are investing in a joint venture rail terminal in Edmonton to provide cost-advantaged export logistics for the growing supply of Western Canada crude oil. The new terminal will begin operating in 2015 with a capacity of 210 thousand barrels per day. Additional investments are also under way to expand product logistics capabilities at our large U.S. Gulf Coast refineries (1) A recent Mid-continent success and has U.S. Gulf been Coast the refineries. introduction of priceadvantaged U.S. tight oil and Canadian heavy oil crudes, allowing us to reduce imported crudes. World-Class Operating Efficiency Underpinned by disciplined investments and ongoing efforts to capture efficiencies, worldwide cash operating cost for our portfolio of refineries has consistently been well below the industry average. As examples, our Baton Rouge and Antwerp Refineries are among the lowest-cost refineries in the United States and Western Europe, respectively. With energy representing as much as 60 percent of the operating cost of a refinery, we continue to expand our leadership position in cogeneration capacity to capture additional efficiencies. Portfolio Optimization Disciplined capital management includes continuous assessment and optimization of our asset portfolio. Since 2005, we have reduced our refining capacity by more than 1 million barrels per day by divesting or restructuring 23 less-competitive facilities. The refineries that remain in our portfolio are generally larger, more efficient, and integrated with chemical and lubricant manufacturing facilities. We have also divested or restructured more than 6,000 miles of pipeline, over 200 fuel terminals, 38 lubricant plants, and in excess of 15,000 retail service stations. These portfolio optimizations improve our Downstream return on average capital employed and support our ability to outperform competition across the cycle. DATA as of 01/23/2015: Downstream Return on Average Capital Employed (2) ExxonMobil Integrated Oil Competitor 2013 Average 60 (3) (percent) (1) Mid-continent and U.S. Gulf Coast refineries. (2) See Frequently Used Terms on pages 44 and 45. (3) BP, Chevron, Royal Dutch Shell, 0 and 2010 Total values 2011 estimated on 2012 a consistent basis with ExxonMobil and based on public information

26 24 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Chemical: Progressing Strategic Investments 50% Expected chemical demand growth over the next 10 years.

27 25 PHOTO: The Baytown Olefins Plant in Texas is ExxonMobil s largest ethylene production facility in the world. Our new ethane steam cracker, scheduled to start up in 2017, will increase the site s ethylene capacity by 70 percent.

28 26 EXXONMOBIL 2014 SUMMARY ANNUAL REPORT C R E A T I N G V A L U E T H R O U G H T H E C Y C L E Chemical: Progressing Strategic Investments Our Chemical business is well positioned to capture market growth opportunities by developing world-scale assets that utilize proprietary technologies to capture advantaged feedstocks, deploy lower-cost processes, and increase premium product sales. Our strategic and disciplined investment approach delivers superior returns throughout the business cycle and across a variety of market conditions. United States We have started construction of a multibillion dollar Highlight: Resource to Market ethane steam cracker at our complex in Baytown, Texas, and associated premium product facilities in nearby Mont Belvieu. This expansion, planned to start up in 2017, is ExxonMobil s largest-ever chemical investment in the United States and is As the largest U.S. natural gas producer and a leading chemical manufacturer, ExxonMobil is designed to be one of the uniquely positioned to capture the value of abundant chemical feedstocks by converting them world s most competitive into higher-value plastics. new petrochemical projects through its scale and production of premium products. ExxonMobil is an early mover in capturing abundant, affordable supplies of feedstock and energy in North America, supported by integration with our Upstream business. Our Baytown Plant is the largest integrated refining and chemical manufacturing site in the United States, and includes ExxonMobil s largest ethylene production facility in the world. The project will increase our North American ethylene capacity by more than 30 percent. Two world-scale polyethylene lines, among the largest in industry, will be added at the Mont Belvieu Plastics Plant to produce a mixed slate of polyolefin products, including metallocene polyethylene. Demand growth for this premium product is higher than commodity polyethylene and commands a margin premium based on sustainability and performance advantages. We plan to build on our existing global supply chain and our commercial and technical resources to further penetrate growth markets around the world. Singapore At our Singapore petrochemical hub, we have started a project to add production of halobutyl rubber and premium resins for adhesive applications. These facilities will be the largest units we have ever built for these polymers. The project will use proprietary technologies and benefit from the feed-flexible steam crackers, integration with the large complex, and efficient supply chain access to meet growing demand in Asia. We are a leading global supplier of these specialty polymers and our 2017 start-up will further increase our competitive position. Demand for both product lines is growing faster than GDP, with demand for hydrogenated resins used in adhesive applications expected to double over the next 15 years. With the global number of cars and light trucks expected to double by 2040, our projects in Saudi Arabia and Singapore will help meet rapidly growing demand for halobutyl rubber used in tire innerliners.